AdaptHealth Corp (AHCO) Reports Solid Revenue Growth Amidst Net Loss Due to Goodwill Write-Down
Net Revenue: Increased by 7.7% to $3.2 billion in FY 2023.
Net Loss: Reported a net loss of $678.9 million due to a significant goodwill impairment.
Adjusted EBITDA: Grew by 13.0% to $670.8 million for the full year.
Cash Flow: Operations cash flow rose by 28.6% to $480.7 million; Free cash flow turned positive to $143.2 million.
2024 Guidance: Projects net revenue of $3.25 billion to $3.35 billion and adjusted EBITDA of $650 million to $710 million.
On February 27, 2024, AdaptHealth Corp (NASDAQ:AHCO) released its 8-K filing, unveiling the financial results for the fourth quarter and the full fiscal year ended December 31, 2023. The company, a national leader in providing patient-centered, healthcare-at-home solutions, reported a significant increase in net revenue, which rose to $3.2 billion, marking a 7.7% growth compared to the previous year. This growth was primarily driven by non-acquired expansion of 7.3%. Despite the revenue increase, the company faced a net loss attributable to AdaptHealth Corp of $678.9 million, largely due to a substantial pre-tax goodwill impairment of $830.8 million.
AdaptHealth's adjusted EBITDA for the year showed a robust increase of 13.0%, reaching $670.8 million. The company also experienced a notable improvement in cash flow from operations, which surged by 28.6% to $480.7 million. Free cash flow also saw a positive shift, increasing to $143.2 million from a negative $17.6 million in the previous year. For the fourth quarter specifically, net revenue increased by 10.0% to $858.2 million, and adjusted EBITDA rose by 40.2% to $204.6 million.
Looking ahead, AdaptHealth provided initial financial guidance for the fiscal year 2024, projecting net revenue between $3.25 billion and $3.35 billion, with adjusted EBITDA anticipated to be in the range of $650 million to $710 million, and free cash flow expected to be between $150 million and $180 million. This guidance does not account for contributions from acquisitions that have not yet closed and assumes that the 75/25 blended Medicare reimbursement rate adjustment in non-rural, non-competitive bid areas is not extended.
"We closed out 2023 with strong performance across the board in the fourth quarter. Driven by continued strength in sleep and respiratory, we generated record revenue of $3.2 billion, up 7.7% year-over-year, nearly all from non-acquired sources. We are also quite pleased that Adjusted EBITDA for the year increased at an even faster rate, giving us confidence that the strategic initiatives we undertook to improve efficiency have started to produce results," said Richard Barasch, Chairman and Interim CEO of AdaptHealth.
AdaptHealth's balance sheet reflects a decrease in total assets from $5.2 billion in 2022 to $4.5 billion in 2023, with goodwill accounting for a significant portion of this decrease due to the impairment. The company's total liabilities decreased slightly, and stockholders' equity saw a notable reduction from $2.2 billion to $1.5 billion, reflecting the impact of the net loss.
The company's cash flow statement highlights the improved cash flow from operations and the positive shift to free cash flow, indicating a stronger financial position and the ability to generate cash from its core business operations.
In conclusion, AdaptHealth's financial performance in 2023 was marked by solid revenue growth and improved cash flows, despite the significant net loss due to the goodwill write-down. The company's outlook for 2024 suggests continued growth and operational efficiency, with a focus on non-acquired growth and strategic initiatives. Investors and stakeholders will be watching closely to see if the company can maintain its momentum and achieve its projected targets for the coming year.
For more detailed information on AdaptHealth Corp's financial results and outlook, interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from AdaptHealth Corp for further details.
This article first appeared on GuruFocus.
